Statement on AG Settlement Announcement

Today’s announcement of a multi-state mortgage servicing settlement must be the first, not final, step to providing restitution for families who were devastated by the reckless banking practices that crashed our economy. NOTE: If you want help determining if you are eligible, fill out ACCE's tell your story link

Joint statement from California Reinvestment Coalition, Alliance of Californians for Community Empowerment and PICO California:

Today’s announcement of a multi-state mortgage servicing settlement must be the first, not final, step to providing restitution for families who were devastated by the reckless banking practices that crashed our economy.

After a year of negotiations, the nation’s Attorneys General have agreed to the terms of a $25 billion settlement with big banks over their foreclosure practices. California’s Attorney General Kamala Harris today announced that she would join the settlement, which will include $12 billion in principal reduction for underwater California homeowners. There is no doubt that the settlement announced today is stronger than it would have otherwise been, due to the courageous stance of AG Harris and others, who fought hard to bring more relief to homeowners and make sure that any settlement does not allow the banks to avoid accountability for fraudulent activity not yet investigated.

However, the reported $1,800 restitution payment for those who already lost their homes is just a tiny fraction of the wealth stripped from so many families, especially families of color. That’s why, as members of the ReFund California Coalition, the Alliance of Californians for Community Empowerment (ACCE), California Reinvestment Coalition (CRC), and PICO California will continue to fight to ensure that the current deal is just a down payment on a much larger investigation that brings justice to California homeowners harmed by the big banks. We look forward to working closely with the Attorney General’s office to pursue meaningful, permanent reform for Californians that will hold the banks accountable.

"This settlement is a down payment on the debt owed to homeowners and communities by the Wall Street gamblers that crashed our economy. It will bring relief to some of the victims of the fraud and abuse of Wall Street, but there is much more that needs to be done. ACCE and the ReFund California coalition will be working with Attorney General Harris to make sure there is real implementation and enforcement of this settlement. We will also be pushing for further litigation to bring broader relief to homeowners and working to pass legislation in California that will stop wrongful foreclosures that are still happening every day,” said Vivian Richardson, ACCE member and Home Defender Still Fighting for Principal Reduction.

In California, one out of every three homeowners owes more on their house than it is worth. In the counties that have been hardest hit by the foreclosure crisis, home values continue to plummet as foreclosures remain rampant. The $12 billion in principal reduction included in the settlement begins to address this crisis, but much more is required. In particular, President Obama should replace the leadership at the Federal Housing Finance Agency, which has obstructed efforts to allow Fannie Mae and Freddie Mac to reduce principal that would save the taxpayers tens of millions of dollars. Principal reduction is essential to protecting California’s homeowners and stabilizing these communities. Banks should immediately extend and expand this important relief to Californians beyond just the terms of this settlement.

“There are lots of numbers in this settlement, but in the midst of the numbers, we cannot forget the human pain and loss that no settlement can ever erase. Damage has been done. But PICO CA and our ReFund allies, people of faith and good faith, will continue to work to build on this ‘small down payment’ to ensure that justice is done, that the help our hardest hit families deserve is won, and ‘that the policies and attitudes at the root of this crisis are forever changed," said Pastor Lucy Kolin, a clergy leader with the PICO California network.

“Holding banks accountable to this settlement is going to be its most important measure of success. Enforcing the terms of this deal, and penalizing banks when they do not meet the targets set forth in the agreement, are the only guarantee that Californians have for real relief. Californians need immediate relief and protection, with no further delays. We hope that this is not another Countrywide settlement full of broken promises. CRC and ReFund California will work hard to ensure that does not happen in California,” said Kevin Stein, Associate Director of the California Reinvestment Coalition.

The nation’s biggest banks have decimated California’s communities through irresponsible lending and foreclosure practices. This settlement is one aspect of relief for Californians, but there is much more work to be done. Bankers paid themselves a near-record $144 billion in bonuses in 2011; as they cash in, homeowners are still struggling to pay their mortgages.

ReFund California is calling upon Governor Brown and the State Legislature to take the critical next steps in holding banks accountable and providing relief for homeowners by passing strong legislation that provides clear and enforceable due process rights for homeowners for the wrongful and egregious practices that led to the decimation of so many of our communities. As the California State Legislature reflects on this settlement and the ongoing foreclosure crisis in the communities that they represent, they should immediately institute legislation that puts an end to the many dubious foreclosure practices that this agreement does not cover. ReFund California will continue to fight hard for Californians in the coming months as this settlement begins to distribute relief to Californians, and as further actions are taken to solve this crisis.

ABOUT US: ReFUND California is a coalition of organizations throughout California committed to exposing the unfairness of the state’s current economic reality and engaging in public campaigns to force the changes that are necessary.